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ICIS: US shale gas boom will lead to a US petrochemical bust
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[China, Shanghai Published:2013-01-11]

 

ICIS: US shale gas boom will lead to a US petrochemical bust by 2017

The US shale gas boom and resulting low price of natural gas is spurring a wave of new crackers and expansions in the country. Ultimately, the US ethylene market could see a 29% increase in capacity by 2017.

Three local producers-Dow Chemical, Shell and Chevron Phillips-are proceeding with world-scale crackers, set to start up in 2016-2017. South Africa-based Sasol, which already has a mid-size cracker in Lake Charles, Louisiana, is considering the construction of a 1.0-1.5m tonne/year cracker at the same site, ¬aiming to complete the study by the second half of 2013.

Plus, many others are expanding or considering new world-scale crackers. Yet more are also moving to ¬convert their plants to crack lighter feeds.

Ultimately, a 29% boost in US ethylene capacity by 2017 will cause a profound disruption in the market.

Many things have to go right for this capacity to be ¬absorbed. Many are counting on naphtha-based crackers in ¬Europe and Asia shutting down. Yet Europe integrated polyethylene (PE) margins have equaled or exceeded those of US producers in every year from 2008-2011. So far in 2012, US producers have taken the lead as ethane prices plunge. But don't count on a wave of Europe cracker closures just yet.

 

 

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